BANNING CONTRACTORS

QUESTION:
Is it permissible to blacklist a contractor in our newsletter or would we need to say something to the
effect of "Contact a board member for a list of contractors who've done a
good job and ones to avoid"?

ANSWER:
This comes up from time-to-time in associations I represent. It happens
more often in condominium developments because of common elements
inside condo walls. Following are your options:

Good Contractors.
Associations can keep a list of "recommended" vendors (such as
electricians and plumbers) for owners to use. Doing so has two benefits:
(i) it's a great convenience to owners who have no idea who to hire and
(ii) you get vendors who are familiar with the development, do good
work, and are properly licensed and insured (assuming the association
screened them).

Bad Contractors. When it comes to "bad" contractors, associations have several options. They can do the any of the following:

1. Owner Reviews.
They can keep a list of homeowner "reviews" of various contractors,
just as the Better Business Bureau, YELP and others do. The association
does not make any recommendations, it simply compiles reviews--good, bad
and ugly--and makes them available to homeowners.

2. Recommendations.
Associations can take a more affirmative role in one of two ways. They can either:

a. Authorized Contractors. Publish a list of authorized contractors for owners to use, i.e., those vendors who are licensed and insured, and leave off the list the known bad contractors. Or,

b. Full Contractor List. List the authorized contractors but also add a section of contractors the association recommends against using. The association is not prohibiting the bad vendors, it is merely recommending against using them based on complaints it received from owners as well as their own experience with
contractors who violate the association's rules.

3. Blacklist.
The final option is to ban bad vendors from the development. This is especially relevant in condominium developments
where contractors (such as electricians and plumbers) open common area
walls to perform work. If their work is shoddy, it can result in
significant damage to the common areas and other units. Since the
association controls
the common areas, boards have a right to
protect the association from contractors who (i) damage the common areas, (ii) violate the association's parking rules, hours of construction, etc.,
and (iii) perform shoddy work that could result in harm to common areas
and surrounding units from water damage, mold, electrical fires and the
like. Arguably, boards have a duty to ban such contractors.

Recommendation:
If boards create a list of recommended contractors and/or ban bad
contractors, they need a paper trail justifying their decision in the
event they need to defend it. The vendor list can be published in the
newsletter or kept in the association's office.